Changes to the Residential Tenancy COVID Regulations

The temporary tenancy moratorium introduced to restrict when landlords could evict tenants due to rental arrears as a result of COVID-19 ended on 26 March 2021.

From 27 March 2021, a six-month transitional period has begun.

What are the rules during the transitional period?

A six-month transitional period means COVID-19 impacted tenants who accrued rent arrears between 15 April 2020 and 26 March 2021 (the moratorium period) will not be subject to the standard tenancy eviction rules for those arrears.

• Tenants and landlords will be assisted by Fair Trading to negotiate repayment plans for arrears accrued during the moratorium period.
• Landlords will only be able to evict these tenants for these arrears if they have first attempted in good faith to negotiate a repayment plan. It also has to be fair and reasonable to evict.
• If a landlord and tenant have agreed to a repayment plan, the tenant cannot be evicted unless they have failed to meet agreed repayments on two consecutive occasions.
• Tenants and landlords will continue to be able to apply to NCAT to terminate tenancy agreements on the basis of hardship.
• Termination proceedings already started during the moratorium period will continue under the rules in place during that time.

Existing agreements between a tenant and landlord about the waiver or deferral of rent payment will not be affected by the end of the moratorium and the transitional measures.

The measures also prevent landlords from evicting a COVID-19 impacted tenant who accrued rental arrears during the moratorium period using the ‘no grounds’ eviction process (which applies to periodic leases), unless it is fair and reasonable to do so.

COVID-19 impacted tenants are also permanently protected from being listed on tenancy databases for arrears accrued during the moratorium period.

Landlords will be able to terminate any tenant under standard provisions for arrears accrued after the moratorium measures end on 26 March 2021.

The transitional measures will end on 26 September 2021.

The NSW Fair Trading website has developed a flowchart that clearly shows how the transitional measures may affect a tenancy agreement.  The link to the flowchart is – https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0007/972376/flowchart_termination-tenancy-after-COVID19.pdf

As an agent, if you are approached by a tenant to negotiate a repayment plan, you must contact the landlord as soon as possible to discuss the tenant’s financial hardship and opportunities for a rent arrears repayment plan.

The landlord’s financial hardship and opportunity for mortgage relief or land tax, and income tax relief (if applicable) must also be considered.

As an agent, you should try to understand both the tenant’s and landlord’s financial circumstances to help ensure a workable outcome.   Fair Trading encourages agents to ensure:

• both parties are aware Fair Trading can help with dispute resolution if a rental arrears repayment agreement can’t be reached
• correspondence is promptly responded to
• any evidence required from tenants is reasonable and sufficient to show the person was COVID- impacted and suffered a loss of household income
• repayment plans adequately detail the amount of rent to be repaid, and the payment amount and frequency
• accurate documentation of interactions and discussions with landlords and tenants during COVID rental arrears repayment negotiations. This will be especially important if the matter progresses to the Tribunal.

If you have attempted to negotiate a rent arrears repayment plan without success, trained dispute resolution officers in Fair Trading are available to help landlords, managing agents and tenants.

The applicant will need to complete a formal arrears repayment negotiation application form and submit this along with your request for assistance via the Tenancy Complaint Form.  See the NSW Fair Trading website for both of these forms.